Destabilizing of Islamic Finance Futures Market in Derivative Sector

In recent times the global financial industry is witnessing a sharp rise in Islamic Banking products .Today more than 1340 Islamic Financial Institutions are operating across the globe .The estimates reported by S& P for Islamic Banks Derivative Market is $ 4 trillion .The purpose of this study is to identify the bounds on Futures Market which comes under the purview of Sharia Compatible Futures ( SCF ) which comes under the scanner of Islamic Financial Futures undermining Investment in Islamic Derivative market. This
paper assesses the gaining momentum as the instrument reallocates risks among those who chose to trade in futures contract and disseminate information flow for prices in spot Market .The paper also carried out to differentiate the conventional model of futures pricing with Islamic Model and how the Sharia Compatible Futures dabble in Futures Market with protected risk.
Keywords: Sharia Compatible Futures, Islamic Banking, Risk

“As Islamic finance grows globally, Sharia-compatible futures offer a pathway to risk-managed investing—where ethics and economics align.”

This study explores the expanding role of Sharia Compatible Futures (SCF) in the global Islamic financial landscape, now estimated at a $4 trillion derivative market. By distinguishing SCF from conventional futures models, the paper emphasizes how Islamic financial instruments can reallocate risk and enhance price discovery in a manner aligned with Sharia principles. The findings highlight the growing relevance of SCF in promoting ethical risk management and supporting informed trading in the spot market, reinforcing their viability as a key component of Islamic banking and derivative investment.